Presumptive rental income tax in Zimbabwe: A practical guide for property owners, agents and tenants

bY Delight Ganhiwa

Zimbabwe introduced presumptive rental income tax through the Finance Act, 2025 (Act No. 7 of 2025), with effect from 1 January 2026.

The measure is provided for in section 36R, read together with the Thirty-Ninth Schedule to the Income Tax Act [Chapter 23:06]. The Zimbabwe Revenue Authority subsequently issued Public Notice 08 of 2026 to explain the administration of the tax. In practical terms, the new regime targets rental income derived from premises used for trade, business, or occupational purposes, rather than purely residential lettings.

Who is liable for the tax?

The tax is generally borne by the registrable proprietor, namely the landlord, property owner, lessee or sub-lessee who receives rental directly or indirectly from a tenant carrying on trade, business or an occupation on the premises.

The regime is therefore aimed at commercial and business-related rental arrangements. Where a property has both commercial and residential use, only the portion relating to business use falls within the presumptive rental income tax net. Purely residential rentals are excluded. Non-resident proprietors with Zimbabwean property interests are also required to appoint a resident representative in Zimbabwe for purposes of compliance.

The presumptive rental income tax is charged at 15% of gross rental income. It is treated as a final tax, meaning that no deductions or allowances are permitted in determining the taxable amount.

The tax also cannot be claimed as a credit, refund or set off against any other income tax liability. This makes the regime simple in form, but potentially costly in substance where property owners incur significant financing, maintenance or management expenses.

What is the position for landlords already registered for income tax?

A key practical issue concerns proprietors who were already registered for income tax and were declaring rental income through the normal self-assessment system up to 31 December 2025. Based on the administrative position reflected in the public notice, such taxpayers may continue to account for their rental income through the ordinary income tax system at normal rates, rather than automatically falling into the presumptive regime. This distinction is important because it creates a different tax outcome depending on the taxpayer’s registration and compliance status before the effective date.

What about landlords not previously registered with ZIMRA?

Persons who were not registered with ZIMRA before 31 December 2025 and who derive rental income from premises used for business purposes must regularise their position from 1 January 2026. The public notice indicates that such persons must register for presumptive rental income tax. However, there is also a view that the legislation does not necessarily displace ordinary income tax registration for registrable proprietors who enter the market after 1 January 2026. This is an area where the wording of the law and the administrative guidance may not be perfectly aligned, and affected taxpayers should obtain case-specific advice before settling on a compliance approach.

From a policy perspective, this measure resembles other presumptive tax regimes designed to widen the tax base and improve collections from sectors perceived to be under-taxed or difficult to monitor. Its extension into the commercial rental space is significant because it shifts the compliance burden beyond informal traders and directly affects landlords, estate agents, intermediaries and even tenants. For that reason, the tax should not be viewed merely as a technical withholding obligation, but as a broader compliance framework with operational and contractual implications.

Registration requirements

Any registrable proprietor leasing land or buildings for business use must register with ZIMRA. A person who becomes registrable after commencement is generally expected to apply within 30 days. The registration process also requires the submission of property schedules and tenant details, and taxpayers should keep these records current where there is any change in address, tenant profile or cessation of business activity.

Filing and payment deadlines

The compliance cycle is monthly. Returns must be submitted by the 5th day of the following month, and the corresponding tax must be paid by the 10th day of that month. Given the short turnaround time, landlords and agents should ensure that lease administration, rent collection and tax remittance processes are aligned from the outset.

Role of Agents (e.g. Estate Agents)

Where rental is received by an estate agent, any intermediary, or trustee, or sub-lessee, such person is deemed to be a statutory agent and is required to pay the tax where the proprietor has not done so, remit the tax to ZIMRA, and Issue a withholding certificate in the prescribed form.

Tenant Responsibility

If landlord/agent fails to pay, ZIMRA can require the tenant to pay tax directly. In such cases, the law protects the tenant from eviction, or rental escalation for a period of three (3) months solely due to compliance with the tax obligation.

Interaction between presumptive rental income tax and other tax heads

Presumptive rental income tax does not replace VAT, and where rental is subject to VAT, VAT continues to apply, at 15.5% tax calculated on rentals. Presumptive rental income tax operates independently and does not affect PAYE, non-residents’ tax, or any other withholding tax obligations. The landlords must continue collecting from eligible tenants the informal trader’s tax (10% of rent). This is a tax on the income of the tenant and not a tax on the landlord.

Penalties for non-compliance

Failure to remit presumptive rental income tax may result in recovery of the outstanding tax and a penalty equal to 100% of the unpaid tax.

While the contents of the public notice are noted, it is our considered opinion that it is not coordinated with the section 36R as read with Thirty Ninth (39) schedule of the income tax act. Care should be exercised as these are administrative guidelines. Taxpayers in the rental income space (REITs, Large scale land developers, and others) are welcome to engage us for tailored tax opinions on a case-by-case basis.”

DISCLAIMER

The views and opinions expressed in this article are those of the author, Delight Ganhiwa, Tax Supervisor at BDO and do not necessarily reflect the official policy or position of the BDO Zimbabwe. This article is intended for informational purposes only and should not be construed as legal, tax, or financial advice. Consult mngorima @bdo.co.zw for advice tailored to your requirements.